A comparative income statement is given below for Rainbow CompanyRainbow CompanyComparative Income StatementFor the Years Ended June 30, 2019, and 201820192018SalesP5,000,000.00P4,000,000.00Less: Cost of Goods Sold3,160,000.002,400,000.00Gross Margin1,840,000.00 P1,600,000.00Selling Expenses900,000.00700,000.00Administrative Expenses680,000.00584,000.00Total Expenses1,580,000.001,284,000.00Net Operating Income260,000.00P316,000.00Interest Expense70,000.0040,000.00Net Income Before TaxesP190,000.00 P276,000.00The president is concerned that net income is down in 2019 even though sales have increasedduring the year. The president is also concerned that administrative expenses have increased,since the company made a concerted effort during 2019 to pare "fat" out of the organization.Required:1. Express each year's income statement in common-size percentages. Carrycomputations to one decimal place.2. Comment briefly on the changes between the two years.

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Description: A comparative income statement is given below for Rainbow CompanyRainbow CompanyComparative Income StatementFor the Years Ended June 30, 2019, and 201820192018SalesP5,000,000.00P4,000,000.00Less: Cost of Goods Sold3,160,000.002,400,000.00Gross Margi

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A comparative income statement is given below for Rainbow Company Rainbow Company Comparative Income Statement For the Years Ended June 30, 2019, and 2018 2019 2018 Sales 5,000,000.00 P 4,000,000.00 Less: Cost of Goods Sold 3,160,000.00 2,400,000.00 Gross Margin 1,840,000.00 P 1,600,000.00 Selling Expenses 900,000.00 700,000.00 Administrative Expenses 680,000.00 584,000.00 Total Expenses 1,580,000.00 1,284,000.00 Net Operating Income 260,000.00 P 316,000.00 Interest Expense 70,000.00 40,000.00 Net Income Before Taxes 190,000.00 P 276,000.00 The president is concerned that net income is down in 2019 even though sales have increased during the year. The president is also concerned that administrative expenses have increased, since the company made a concerted effort during 2019 to pare "fat" out of the organization. Required: 1. Express each year's income statement in common-size percentages. Carry computations to one decimal place. 2. Comment briefly on the changes between the two years.

A comparative income statement is given below for Rainbow Company Rainbow Company Comparative Income Statement For the Years Ended June 30, 2019, and 2018 2019 2018 Sales 5,000,000.00 P 4,000,000.00 Less: Cost of Goods Sold 3,160,000.00 2,400,000.00 Gross Margin 1,840,000.00 P 1,600,000.00 Selling Expenses 900,000.00 700,000.00 Administrative Expenses 680,000.00 584,000.00 Total Expenses 1,580,000.00 1,284,000.00 Net Operating Income 260,000.00 P 316,000.00 Interest Expense 70,000.00 40,000.00 Net Income Before Taxes 190,000.00 P 276,000.00 The president is concerned that net income is down in 2019 even though sales have increased during the year. The president is also concerned that administrative expenses have increased, since the company made a concerted effort during 2019 to pare "fat" out of the organization. Required: 1. Express each year's income statement in common-size percentages. Carry computations to one decimal place. 2. Comment briefly on the changes between the two years.

Principles of Accounting Volume 1

19th Edition

ISBN:9781947172685

Author:OpenStax

Publisher:OpenStax

Chapter6: Merchandising Transactions

Section: Chapter Questions

Problem 15EA: The following select account data is taken from the records of Reese Industries for 2019. A. Use the...

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The comparative statements of Pharoah Company are presented here: Pharoah CompanyIncome StatementsFor the Years Ended December 31 2020 2019 Net sales $1,898,740 $1,758,700 Cost of goods sold 1,066,740 1,014,200 Gross profit 832,000 744,500 Selling and administrative expenses 508,200 487,200 Income from operations 323,800 257,300 Other expenses and losses    Interest expense 23,400 21,400 Income before income taxes 300,400 235,900 Income tax expense 93,400 74,400 Net income $207,000 $161,500 Pharoah CompanyBalance SheetsDecember 31 Assets 2020 2019 Current assets    Cash $60,100 $64,200    Debt investments (short-term) 74,000 50,000    Accounts receivable 126,000 111,000    Inventory 127,400 116,900      Total current assets 387,500 342,100 Plant assets…
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